Auto, Auto Ancillary Q2 Earnings Preview - Unlock Aids Volumes; Modest Margin Uptick On Cards: ICICI Direct
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ICICI Direct Report
The auto industry posted a healthy sequential rebound (total industry volumes up ~35% QoQ) on the demand front post state-specific unlocking in Q2FY22.
All segments ex-passenger vehicle (impacted by chip shortages) posted double-digit QoQ volume increases with commercial vehicle space outperforming as a whole.
Operating leverage gains due to higher volumes are expected to have more than offset elevated commodity costs, with the universe thereby seen recovering from lower margin profile in Q1 FY22.
We expect our coverage universe to report 8.7% QoQ topline growth and ~60 basis points QoQ Ebitda margin increase to 10.7%, with profit after tax growth of 35.7% QoQ.
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